The Federal Government has set aside N1.7 trillion in the 2026 Appropriation Bill to settle outstanding debts owed to contractors for capital projects executed in 2024.
The amount appears under the line item titled “Provision for 2024 Outstanding Contractor’s Liabilities”, reflecting official recognition of delayed payments amid protests by contractors over unsettled obligations.
The move follows pressure from indigenous contractors and civil society groups who, in 2025, raised concerns that unpaid contracts had exceeded N2 trillion. Members of the All Indigenous Contractors Association of Nigeria had staged demonstrations in Abuja, citing difficulties servicing bank loans taken to complete government projects.
Earlier, Minister of Works David Umahi had pledged to clear verified arrears before the end of 2025. However, only partial payments were made due to revenue constraints, prompting the inclusion of the N1.7 trillion line item as a catch-up measure in the 2026 budget.
In addition, N100 billion has been allocated under a separate heading, “Payment of Local Contractors’ Debts/Other Liabilities”, to address legacy debts, smaller contract claims, or unresolved obligations not fully verified in the current audit.
The combined N1.8 trillion allocation forms part of the N23.2 trillion capital expenditure in the 2026 fiscal plan, aimed at ramping up infrastructure delivery while settling past obligations.
Contractor debt in Nigeria has been a recurring issue, worsened by delayed capital releases, partial cash-backing of projects, and shortfalls in revenue targets.
Babatunde Seun-Oyeniyi, National Secretary of the All Indigenous Contractors Association of Nigeria, told journalists in December 2025 that repeated delays forced contractors to resume protests. He said members were owed over N500 billion for completed projects, with multiple follow-up meetings with Finance Minister Wale Edun producing no tangible results.
“The problem is that they want to put us into a backlog. They want to shift us to 2026; then they are going to pay,” Oyeniyi alleged.
Earlier in August 2025, the government claimed it had cleared over N2 trillion in outstanding 2024 capital budget obligations, promising timely release of 2025 capital funds. Finance Minister Wale Edun stated at the time that the focus had shifted to 2025 capital releases, adding that Nigeria remained open for business to global investors.
President Bola Tinubu also expressed “grave displeasure” over the backlog and established a high-level committee to verify contractor claims and facilitate payments. Special Adviser on Information and Strategy, Bayo Onanuga, said the President wanted a “one-stop solution” for the issue.
The new 2026 budget, totaling N58.47 trillion, earmarks N23.2 trillion for capital expenditure, N15.9 trillion for debt servicing, N15.25 trillion for recurrent spending, and N4.09 trillion for statutory transfers. The disbursement for contractor arrears will be based on verified and certified claims from the committee’s exercise.
